What is the future value of a 10%, 14-year ordinary annuity that pays $100 each year?

To calculate the future value of an ordinary annuity, we use the formula:

\[
FV = P \times \left( \frac{(1 + r)^n - 1}{r} \right)
\]

Where:
- $FV$ is the future value of the annuity,
- $P$ is the payment made each period,
- $r$ is the interest rate per period,
- $n$ is the total number of periods.

For this problem:
- $P = 100$,
- $r = 10\% = 0.10$,
- $n = 14$ years.

Let’s calculate the future value of this annuity:

\[
FV = 100 \times \left( \frac{(1 + 0.10)^{14} - 1}{0.10} \right)
\]

Now, I'll compute the future value.The future value of the 14-year ordinary annuity with a 10% interest rate and annual payments of $100 is approximately **$2,797.50**.

Would you like further details or have any questions?

Here are some related questions:
1. How does the future value change if the interest rate increases?
2. What is the present value of this annuity?
3. How would the calculation differ for an annuity due (where payments are made at the beginning of each period)?
4. What happens if the payments are semi-annual instead of annual?
5. Can you compute the total interest earned from this annuity?

**Tip:** Increasing the interest rate or the number of periods significantly increases the future value of an annuity due to compounding.

Discover how to calculate the future value of a 14-year ordinary annuity with a 10% interest rate and annual payments of $100. This problem involves key concepts in annuities, compound interest, and future value calculations. Suitable for high school or college-level students.

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